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Thursday, December 21, 2006

Franco-Russian energy tie-up. Ever wonder why Jacques Chirac decided to give Vladimir Putin the Légion d'honneur, France's highest decoration? Or why he invited him to his birthday dinner in Riga? Could it be anything to do with this? So much for the EU speaking with "one voice" on Russia...

Democracy- Iran style. For an interesting analysis of the recent Iranian elections check out the Head Heeb. The author Jonathan Edelman cautions against seeing the result as a victory for the reformers, despite their gains. Instead it should be seen as a victory for Supreme Leader Ayatollah Ali Khamenei who managed to stop President Mahmoud Ahmedinejad and his spiritual mentor Ayatollah Mohammed Taghi Mesbah-Yazdi from taking control of the Assembly of Experts, which would have allowed them to replace Khamenei and concentrate power in the hands of the President. His tactics? Simple: just use the Guardian Council to block two-thirds of candidates - particularly those who were pro-Ahmedinejad.

And finally:

"What a sorrow has fallen the Turkmen people": President Saparmurat Niyazov of Turkmenistan has died of heart failure. The colourful but oppressive Niyazov was known for spending his country's considerable energy wealth on grand schemes such as a huge, man-made lake in the Kara Kum desert, a vast cypress forest to change the desert climate, and an ice palace outside the capital. He gave himself the title of Turkmenbashi "Great Leader of all Turkmen." He ordered the months and days of the week named after himself and his family, and had statues of himself erected throughout the nation. He even built a statue of himself on top of the capital's neutrality arch which rotates 360 degrees so that it is always facing the sun. Modestly, he said “I'm personally against seeing my pictures and statues in the streets - but it's what the people want.” Children pledged allegiance to him every morning in schools before studying from books he had written. His writings were also required reading for driving tests and for all adults on Saturdays.

Tuesday, December 19, 2006

The BBC is leading this morning with the ridiculous Chatham House paper on Blair's Foreign Policy record.

Who are these people? The author of the document (all five-and-a-half pagesof it) is Professor Victor Bulmer-Thomas, who had a background in Latin American politics before taking over at the RIIA (Chatham House).

"Tony Blair's successor(s) will not be able to offer unconditional support for US initiatives in foreign policy and a rebalancing of the UK's foreign policy between the US and Europe will have to take place."

And that's as detailed as the argument gets - basically an assertion of the random political preferences of Prof. Bulmer-Thomas.

Margaret Beckett has hit the nail on the head with her response: "This paper is threadbare, insubstantial and just plain wrong. Chatham House has established a great reputation over the years, but this paper will do nothing to enhance it."

So why does this ludicrous piece of junk get on the top of the news? It coincides exactly with the BBC world-view: Blair's a poodle, Bush is an ape, we should bin the yanks and "get deeper into Europe" in some unspecified way.

Quite apart from the headline message, the paper is a frustrating read. For example there is a throwaway line about how "The emphasis on aid and debt relief for Africa in return for an improvement in governance may come to look strangely old-fashioned." What does this mean? We are not told.

The sniffy tone doesn't help either: "Tony Blair has learnt the hard way that loyalty in international politics counts for very little." That sort of stuff obviously does it for the BBC in a big way, but it doesn't leave any of us any the wiser about how the RIIA think we should run our foreign policy.

The only good thing about the report is that it's a good distillation of the intellectual incoherence / fantasy politics at the heart of the pro-euro movement. For example:

What US governments want is a European Union that can make a real contribution to the international political and security agenda, and any European government with the diplomatic skills to deliver EU support will be hugely appreciated. Britain has an opportunity to play that role provided it is taken seriously by its European partners and contributes fully to the European project. In due course, that will require the United Kingdom to revisit its opposition to joining both the Schengen agreement and the Eurozone.

So the solution for our problems in Iraq, Afghanistan, Iran etc is... for Britain to join the euro? These people have lost their minds.

The US would certainly like European countries to pull their finger out, deploy troops in the dangerous parts of Afghanistan, and relax the rule-of-engagement / human rights law constraints on what they can do. The US would like European countries to spend more on defence. They would probably like more diplomatic support too.

The problem is that for several countries European defence is about finding a way to spend even less on defence. Its about pointlessly confronting the US diplomatically, and it weakens the international structure (NATO) which allows meaningful transatlantic cooperation. Instead the EU offers the prospect of endless meetings, and press-release diplomacy. Somebody once said that the EU was a like a retirement home for former world powers. In that sense the EU and RIIA suit each other well.

Monday, December 18, 2006

According to the Sunday Telegraph many Romanians are already getting fed up with the EU and its attempts to ban local traditions such as sheep-stomach wrapped cheeses, leaving corpses at home for three days after death, and under-aged marriages in the Roma community. They also want the Romanians to start packaging veg before it is sold from farms, begin taxing home made plum brandy and start killing animals in a more humane manner in front of an inspector.

Railway worker George Margarit summed up this growing disenchantment for the paper:

"I thought when we joined the EU we'd get lots of benefits and freedom. But what does freedom mean if I can't slaughter my own pig in my back yard?"

They left telling us that they would return when we'd made the bags lighter and EU compliant. The irony of a report on EU over-regulation being slowed down by EU red tape was not lost on the team...To be fair though, we're not experts in EU postal directives so we can't immediately check that this isn't just another "euromyth". We're going to look into it and will update you at a later date. If any readers can clear this matter up for us we'd we'd love to know, or if you've got any EU regulation stories that you want to share / get us to chase up stick them in the comments.

Former Europe Minister Denis McShane has a letter in today’s FT, in response to an article by Malcolm Rifkind in the paper on Wednesday.

Some familiar MacShane themes:

“The idea of ‘moderate’ euroscepticism advanced by Sir Malcolm is rather like being a ‘moderate’ unilateralist in the debate over nuclear weapons or a ‘moderate’ anti-American. The difference between euroscepticism and anti-Europeanism is a semantic fiction.”

…Sounds like a reheat of his previous mildly hysterical claim that "Euroscepticism is a misnomer. What we are actually taking about is hatred of Europe and a sense of superiority… I'm afraid we have got a dark streak of xenophobia and racism in our mentality. Anti-Europeanism allows it to get a lot closer to the surface”.

Also some peculiar new claims:

“David Cameron has moved today's Tories further away from Europe than any of his predecessors.”

Eh? More sceptical than IDS or Michael Howard? Hasn’t he just binned a load of their previous pledges, e.g. on unilaterally pulling of the CFP? MacShane also includes his usual spiel about how being critical of the EU will make the Tories unelectable:

“until the Conservative leadership, not backbenchers, take on the Tory anti-Europeans in the same manner Tony Blair, Gordon Brown and John Smith vanquished Labour's eurosceptics, then we must judge David Cameron's Tories by what they say and do and not by what Sir Malcolm wishes his party to be.”

Er… quite apart from the fact that euroscepticism doesn’t have the same role for the Tories as nuclear disarmament did for Labour, this strikes us as kind of off-the-pace even in terms of what is happening within Labour. Opinion within Labour (and the Lib Dems) is now past the high water mark of the starry eyed, everything-Brussels-does-is-great mentality which MacShane represents. It’s not yet clear exactly what approach Gordon Brown will take when he makes the move to No 10, but given his past positioning on Europe, it is highly unlikely to be a mere continuation of Blairite policy. So come next year MacShane is likely to find himself writing a lot more manic green-ink letters to the FT…

Thursday, December 14, 2006

Jose Sequeira, the Commission bureaucrat marched from his office two years ago after the Commission's own medical service said he was mentally unfit to work has been vindicated by an employment tribunal in Luxembourg, with the original decision against him overturned.

This story originally came to light in the FT back in September. Sequeira had raised allegations of corruption in the Jacques Santer-led Commission during the late 1990s. He was then accused of circulating a “defamatory dossier” by his superiors (the dossier was never produced), before being branded mentally unstable by a Commission-contracted psychiatrist. He was then placed on “indefinite sick leave” as a result. Three different doctors have since given him a clean bill of health.

Such cases of mental illness are curiously prevalent in Brussels. Out of the 200 Commission staff members placed on long term sick leave each year, half are prescribed as having mental illness, at a cost to EU taxpayers €74m a year.

Marta Andreassen, who was sacked by then-Commissioner Neil Kinnock in 2004 for blowing the whistle on its financial incompetence, claimed earlier this week that before her departure she had received internal emails which warned, "We have ways of breaking people like you.” Perhaps sometimes, but not in Mr Sequeira's case.

Monday, December 11, 2006

This story literally gets more extraordinary by the day. As Dan Hannan wrote a couple of months ago, "It’s hard to avoid the suspicion that the two events are linked. One day, Günter Verheugen, the Commission Vice-President, attacks the cost of Euro-bureaucracy. The next, photographs appear of the Commissioner strolling hand in hand with a female aide while on a visit to Lithuania."

For those of you who haven't been following the story - a quick recap. Back in October Verheugen told the Sueddeutsche Zeitung that there was a "permanent power struggle" going on between EU Commissioners and their top civil servants. He said that the civil servants had "too much power" and that he had "strongly criticised" some of them for thwarting his deregulation drive. He then upped the stakes further by telling the FT that this failure to deregulate is costing the EU economy €600 billion a year.

That weekend pictures of Verheugen and his chief of staff Petra Erler holding hands on a trip to Lithuania were published in the German press. The following week FT Deutschland reported that EU officials were openly calling for Verheugen to resign over his attack on Commission staff and his reported favouritism in recently promoting Erler - a relative Commission outsider.

Then just last Friday the whole thing got nastier. The Times reported that German weekly Focus was threatening to publish pictures of Verheugen wearing just a baseball cap - on a nudist beach with Erler. Even though the pictures haven't yet been published they have caused quite a stink in Germany where many are calling for Verheugen to resign. One MEP, Herbert Reul said, "It’s unacceptable that an EU Commissioner should be running around naked on a beach with a senior female colleague”.

The powers that be in both Berlin and Brussels have publicly given Verheugen their support -maintaining that this is a private matter. It is unlikely that either he or Erler will be forced out: Verheugen is too important a member of the Social Democrats to be touched while there is a weak governning coalition. Indeed, Erler used to employ a certain Angela Merkel as her spokeswoman when she was in the Eastern German government.

Even still suspicions remain that certain people in Brussels are intent on getting their revenge on Gunter. As the Irish Independent reports:

“Mr Verheugen’s difficulties were predicted last month by the Commission's former chief accountant, Marta Andreassen, who was sacked by then-Commissioner Neil Kinnock in 2004 for blowing the whistle on its financial incompetence... She claimed that Mr. Verheugen was being dragged through the mud because of his complaint that "too much is decided by [EU] civil servants on spending in a non-accountable way. Ms Andreassen says that she received internal emails which warned, "We have ways of breaking people like you."

Friday, December 08, 2006

Charlie McCreevy, the Internal Market Commissioner, has a comment piece in today’s FT on EU financial services regulation, disputing the arguments of our recent study, and a leader in the FT that followed its release.

A few interesting points to pull out from the article:

1) McC: “all the main regulatory issues have been agreed unanimously with member states, with the strong support of the European parliament”…This is a puzzling assertion to make: arguably the most important piece of financial regulation to ever come out of Brussels – MiFID – was certainly not agreed unanimously: the Italian Presidency pushed it through the first reading on a majority vote, which was opposed by a number of member states, including the UK and Ireland. And the Irish Finance Minister who voted against MiFID? A certain Charlie McCreevy…

2) McC: “MiFID is a pro-competitive strategic change of direction”. It’s certainly a change of direction, but whether it will be pro-competition, or even of net benefit is still a highly contentious point. Smaller firms don’t see it in McCreevy’s terms – many fear that it is so onerous that it will drive them out of certain business lines, leaving the larger banks – who can absorb the large compliance costs – to mop up. Industry in general is still lukewarm over the supposed opportunities of MiFID. A survey conducted for the FSA said that “firms are particularly sceptical about the likelihood of benefits arising from MiFID, and generally take the view that the costs of MiFID pose greater challenges than the benefits provide opportunities."

3) McC: “Europe’s share of business rose relative to the US between 2001 and 2005”. This is incredibly complacent. Yes - London has succeeded in prising business away from New York. But the reason for this is not so much an enlightened approach from Brussels as a short-sighted, complacent stance from US regulators in pushing through the Sarbanes Oxley Act, which has unquestionably caused business to migrate offshore. Many of the most important FSAP measures have not yet begun to “bite” – MiFID doesn’t come into force until late 2007 – so it’s probably premature for McCreevy to say that the EU is safe from a similar flight of business. In fact, many of the more mobile companies are considering off-shoring already. Complacency was the undoing of regulators in the US in drafting Sarbox. The Commission could easily fall into the same trap with the Financial Services Action Plan.

Thursday, December 07, 2006

"The Common Agricultural Policy is an economic and humanitarian disaster which pushes up food prices for the poorest in Europe and helps lock the developing world into poverty. And the EU still has higher trade barriers against poor countries than it does against rich."

"If a company director failed to sign off accounts for 11 years, they would probably be heading for jail,"

"We are a new generation. We have no time for the culture of hopelessness that has plagued the way the EU has often attempted to address the big global challenges we face."

“Everybody keeps going on about how disconnected Europe is. Let’s get the Doha trade round started, trade justice is what will connect the EU with voters – rather than the EU picking the fluff out of its own navel,” he said.

“Climate change is what people take to the streets to protest about and the EU has the power to do something. We have a positive message on Europe. There is a new agenda. This is about being positive on the environment, getting change for ACP countries.”

Describing institutional reform as “the boring bit” of European affairs, Cameron said his conviction that Brussels can secure change without a constitution has the backing of many in the European commission.

“Commissioner Dimas was very optimistic that emissions trading can be made to work under the current set up,” he insisted.

“Emissions trading is a great example of what I am talking about. The architecture is already there to make it work…we do not need institutional reform to do this.”

Tory home have condensed it into four issues: global poverty, climate change, fighting fraud and economic competitiveness. They write that: "They neatly combine Euroscepticism with modernising messages on the environment and poverty."

So what to make of it?

Basically in some ways they are on the right track - definitely in terms of picking the "right fights to have". The question is whether/how they now refine it into a clear set of detailed goals and campaigns. It's not 100% clear which way they are going to go yet.

If the tories bought into the Commission & FCO's repositioning line that "the Commission has changed and are now on Britain's side" they would be in real trouble. The bottom line is that despite Barosso talking a good game on deregulation and free trade, the EU regulatory burden is still going up and up; and on trade the EU is the biggest obstacle to a pro-development Doha round. It seems like Cameron is not inclined to believe the hype on those issues.

On the environment things are a bit more mixed. Quite a lot of tories really want to back the ETS because it's green and will make them look softer on Europe. The only snag is that its an expensive failure, and doesn't reduce emissions (as sources as diverse as the Carbon Trust, the FT, the Environment Agency, and the Economist have now pointed out).

Anyway - it's good that they are re-engaging with the issue a bit. But they have a long way to go. Given that the Constitution (sadly) isn't dead - and is in fact coming back in March next year - they don't have long to turn around the way they deal with the issue.

The Treasury have released figs on how much the ECJ ruling on Controlled Foreign Companies is going to cost them. Its easy to find... if you happen to be looking through the footnotes to table 4B, on page 240, Annex B.

Its 540min totalto 2010 and goes up over time:

06-07 07-08 08-09 09-10-15m -100m -175m -250m

PBR also contains further evidence of how hard the Treasury finds it to predict how much we are going to be paying into the EU: Spending for this year, for instance, has gone up from £600m to £2,800 m since the Budget a couple of months ago. Its a bit of a mess.

Liberal Democrat leader Menzies Campbell is to make his first "big" speech on Europe next tuesday morning.

Apparently there is going to be some stuff about distancing ourselves from the US, some stuff about having missed an opportunity to lead in Europe by not joining the euro, and some vague stuff about the need for the EU to be a bit less bureaucratic.

*Sigh*

... the whole thing sounds a bit like it fell through a time tunnel from 1997. Which is a real shame because MC is certainly not thick, and is supposed to have a comparitive advantage on foreign affairs. It will be a bit depressing for Lib Dem MPs too - many of whom have moved away from the starry-eyed nothing-that-comes-from-Brussels-can-be-bad mentality.

It certainly isn't what Lib Dem voters believe. Last time they were asked about the euro (Dec 04) they were 57-43 against joining.

Tuesday, December 05, 2006

People say that curiosity killed the cat. It's certainly capable of absorbing an incredible amount of research time.

We wanted to know which MEPs were most effective in gaining publicity. So we've done a quick back-of-the-envelope ranking based on how many times they have appeared in the press over the last 6 months (as measured by the Lexis Nexis database) and how many hits they turn up on Google.

We're certainly not claiming it's an exact science, and it's definitely not a measure of whether someone is a "good" MEP. There are probably all kinds of problems with the data, which I'm sure you will let us know about.

But anyway, with all that borne in mind it's still quite an interesting ranking. There seems to be a big publicity gap between the best and the worst performing MEPs. Top of the Pops are recently reinstated Tory Roger Helmer and anti-euro Green MEP Caroline Lucas. The Lib Dems seem to dominate the rest of the top of the chart, with the exception of Labour's Richard Corbett.

If anyone thinks they have been hard done by please do let us know, orif you think anyone has been let off lightly, the same applies...

Mischievous German newspaper die Tageszeitung yesterday tried its best to instigate a repeat of this summer's "potato wars" between Berlin and Warsaw.

In July the paper described the Polish President Lech Kaczynski as Poland's "new potato" on the eve of a Berlin summit between Germany, Poland and France. Kaczynski urged Merkel's government to demand an apology, when they refused, he cancelled the summit, claiming that he had a stomach bug.

The summit was rearranged for today and TAZ decided to finally "welcome" the Polish President by printing two pictures of him next to potatoes on its front page below the headline: "Which one of you is it that's coming again?"

According to Reuters "to liken someone to a potato is seen in Polish culture as rather like calling them a peasant."

Ouch. The whole thing is a symptom of a wider tension between the two countries involving everything from the baltic pipeline between Germany and Russia (which goes around Poland) to feelings of a lack of gratitude on the German side - where they feel like they did more than their fair share to aid Poland after the fall of the wall, and to help it join the EU.

Monday, December 04, 2006

According to PA John Reid has today ruled out giving up the UK's veto over police and justice issues. In typical straight-talking fashion he said,

"It's time to move on - it is time to concentrate on our main business,which should always be delivering practical outcomes. There's a clear andprobably overwhelming majority against (giving up the veto). That's our view.That's the view of our governments. We should not, by using weasel words,attempt to revisit this at a higher level when there's such a clearmajority."

Great news. Although I'm not so sure the Commission would agree. One only needs to read an interview from last week with Jonathan Faull, Director-General of the EU Commission's justice department, by the Commons Home Affairs committee (who we gave evidence to a couple of weeks ago).

John Denham asked him:

Can I assume, given the lack of success in the Finnish Presidency, that wewill not hear any more about the passerelle proposal?

(14 countries were apparently against the move)

Mr Faull: No.

Chairman: When do you expect us to hear about it next?

Mr Faull: ... By next summer we may have a better view of where the Union is going more generally, and then it may or may not be necessary to come back to the bridging clause issue.

Some other interesting points from his interview:

Faull says that Europol might soon take on a more hands-on policing approach - something the UK is trying to resist."Europol is designed to co-ordinate, and perhaps one day actually to run, investigations itself in a way which Interpol is not designed to do at all”. The Austrian Presidency also recently mooted giving Europol a greater role in national investigations. Watch this space.

He calls for an EU wide migration policy, so that the EU Commission can barter with non-EU countries over how many of their citizens the EU as a whole should let in each year.

Faull shows just how native he has gone: "among nearly all Europeans, not you [the UK] and not Ireland, of course, the borders have disappeared internally"

And there's this curious answer to Denham's question of whether different countries applying the European Arrest Warrant in different ways has caused any practical problems:

We know what has happened. We do not necessarily know, and this sounds a bitRumsfeldian, what has not happened. We do not know what we do not know, andthese are early days.

Each month the International Crisis Group sends out a bulletin alerting us to new conflicts as they arise. They have just declared November 2006 to be the worst month since they started nearly four years ago:

The sectarian fighting in Iraq is at its worst level since the invasion in 2003. Kofi Annan has described it as "much worse" than a civil war.

Fighting in Sudan is spilling over into its neighbouring countries and the French airforce has been bombing rebels in the Central African Republic.

There has also been some trouble in the South Pacific. Australia and New Zealand had to send in troops to quell the rioting in Tonga and it looks like Fiji might be heading towards its fourth coup in 20 years.

The Fijian military set a deadline for their demands to be met by last Friday. But at the last minute they decided to delay their struggle for power for several days so that the much anticipated annual Police vs Army rugby match could take place. Unfortunately the delay was only temporary, the army moved in to take control of Suva this morning...

A measure of how much the EU cares about the City? Take the MiFID directive - just one of 42 meaures intended to create "a single market in financial services". It's going to cost the UK about £6 billion or so by 2010.

The original idea sounded good - let banks compete more with stock exchanges. Problem: various member states didn't want their tiny bourses to get eaten up by gigantic (London based) banks. So they start presssing for loads and loads of onerous pre-trade trasparency rules to stop all but the most enormous banks getting involved.

Gordon Brown has to take the afternoon off for the birth of his son (fair play considering circumstances). Paul Boateng turns up, asks for a delay. Instead the Italians force an (unprecendented) snap vote to add in the red tape. Then to add insult to injury they pass the final directive by rubber stamping it in the fisheries council.

Richard North reports that Chris Booker on the Sunday Telegraph had his column cut after he penned a piece critical of David Cameron. Regardless of what you think of the piece or the argument - that's a pretty serious thing.

I was told by the SunTel editor today that my item attacking Cameron is to be dropped. This is the first time such a thing has happened since I began writing the column 16 years ago.

Thursday, November 30, 2006

Colin Powell has joined the list of people saying Iraq is a "civil war".

He isn't the only one. Foreign Policy are listing who is, and isn't using "the c word".

The whole thing is becoming a bit of a shibboleth - like the use of "disproportionate" during the war in Lebanon in the summer. Egged on by the Indie the Conservatives said it, but Blair refused to.

Not sure how far the word games really take us... rather more pressingly, Hot Air picks up on the news that the Saudis are considering using their own "oil weapon" against Iran if things get messier still, and are going to get (even) more deeply involved in Iraq anyway.

What a mess. One thing's for sure - in the future UK politicians are going to have to spend more time thinking about hard-edged foreign policy issues and less time worrying about their inner tosser.

Wednesday, November 29, 2006

The NATO summit, which has just finished, will almost certainly be Jacques Chirac's last as French President. True to form he has been the centrepeice of attention, causing offence, blocking proposals, and generally making a nuisance of himself:

First of all he annoys the Latvians by inviting over his mate Vladimir Putin to Riga to celebrate his 74 th birthday. He didn't come in the end but Le Figaro noted that it would have been the first visit by a Russian leader to the Baltics since 1991 and was seen as “a real provocation” by France which had "brought a cold chill" to the country.

He then provoked a bust-up with the Americans by attempting to block plans for partnership agreements with countries like Australia, Japan and New Zealand. Curiously he argued that NATO shouldn't "reward troop providers". Instead Chirac called for NATO to give Iran a greater role in the rebuilding of Afghanistan.

To be even-handed Chirac then annoyed his Central European counterparts by dismissing their pet plan to increase NATO's role in energy security.

Political summits will certainly be less colourful without Chirac's remarks about British food and refusal to listen to speeches in English. On the other hand, with Le Bulldozer gone a little more might get done...

Friday, November 24, 2006

Two interesting papers here and here from National Institute for Economic and Social Research, on the effect of migration within Europe.

Also an interesting factoid: 11.6 per cent of 25-34 year olds in the UK have arrived since 1997. (some of them are in the OE office)

Interestingly, NIESR are much more pessimistic about unemployment than the Home Office. In their modelling experiment 500,000 people arriving in the UK over five years (rather slower than the real rate so far) is predicted to cause unemployment to rise by 0.4 - 0.5%

Meanwhile in Poland: "There is likely to be a decline in the unemployment rate during the first five years after the emigration shock and productivity growth would increase over this period, as employment declines more rapidly than the capital stock can adjust so the capital–labour ratio rises markedly, albeit largely temporarily."

Commission and UK officials have confirmed that next week the Director-General for Regional Policy Graham Meadows will write to the UK authorities highlighting weak audit controls over spending in 2005 by payment agencies in England. The UK will have six weeks to convince the Commission that it has taken appropriate steps to address the shortcomings. But if it fails to do so, the Commission can suspend payments until the problems are resolved.

The structural funds problems come on top of difficulties with Common Agricultural Policy payments. The UK’s Rural Payments Agency, which administers the EU’s single payments scheme is in disarray. The UK’s National Audit Office warned last month that errors and procedural mistakes were likely to lead the European Commission to disallow substantial amounts of EU funding, forcing the UK government to foot the bill.

...The warning on structural funds will be a further embarrassment for the British government which this week announced strengthened audits of how it spends EU funds, following similar pledges by the Dutch and Danish governments.

Message - if you are going to mess with the Commission, you shouldn't be surprised when they mess with you.

Thursday, November 23, 2006

This week's European Voice has a cracking interview with the man behind Nicolas Sarkozy's mini-treaty proposals on the EU Constitution - French MEP Alain Lamassoure. His comments speak for themselves:

"He told European Voice that the premise for Sarkozy’s approach is that anyattempt to relaunch the institutional reforms “could not be allowed to fail”.This meant that EU leaders had to agree not to hold a referendum on a next text,except in Ireland. The constitution would not be renegotiated as such but therewould be an agreement to retain the “heart of the constitution” on which therehad been a strong consensus... As this would be only an ordinary treaty, therewould be no need to “annoy the people” with another referendum, he said."

"The MEP said UK Prime Minister Tony Blair had received the ideas “withinterest” which increased the need to proceed fast with the plans. He said thatcontacts with Blair’s likely successor, Finance Minister Gordon Brown, had been“more complex”."

"Lamassoure rejected the suggestion that Sarkozy was proposing atechnocratic fix to a political problem, saying that the mini-treaty would givemore power to EU citizens. “But in order to do that, we have to go via nationalparliaments,” he said. “It’s not a way to contradict the people.”"

We love the idea that in order to give people a say in the EU it's first necessary to take away their right to a say. They're determined not to let anyone get in the way of their plans - not even Gordon Brown...

Extraordinary scenes at the London School of Economics last night. Peter Sutherland, ex-EU Commissioner and Chairman of BP, was physically stopped from giving a long-scheduled public speech on European foreign policy by a handful of undergraduates wielding “Out Sutherland!” banners. They blockaded the stage and refused to move, to the almost violent frustration of the audience, eventually forcing the lecture to be given elsewhere, almost an hour behind schedule.

Sutherland has recently been appointed Chair of the LSE Council and it seems not everyone is happy about it, on the grounds of BP’s environmental record, and a feeling that “big business” is in danger of jeopordising the LSE’s “social science and Fabian origins.” Someone has posted photos of the protest here.

Eventually, in his long-coming speech Sutherland talked about the need for a “stronger and more integrated Europe”, arguing that single member states cannot be “effective or even relevant” acting alone on the world stage. His justification? “Eurobarometer polls across Europe, including the UK, highlight strong support for “more Europe” in foreign and security policy.”

Only yesterday we suggested that the Commission uses its Eurobarometer polls as a propaganda tool to justify new integrationist policies, as it emerged that it had delayed releasing a poll which found a drop in support for a common EU energy policy. On the pretext that “European citizens clearly expect the Union to use its substantial influence to protect and promote their interests”, he argued for QMV in foreign policy-making, an EU foreign minister, the creation of a European diplomatic services, a legal personality for the EU, and the end of the rotating Presidency role in foreign affairs – all elements of the rejected EU Constitution.

The whole tone of Sutherland’s speech – the undemocratic, press-on-regardless mentality – was just as much a throwback as the protesting students.

Poor old Geoff Hoon. It seems that hardly a week goes by without him suffering another humiliation. It all began with the cabinet reshuffle in May. According to Dominic Lawson, Hoon was confident he would be moving back up the ministerial ladder. The night before the local elections - Lawson tells us - Hoon was interviewed by David Dimbleby on the imminent reshuffle:

"Will you be standing by your phone, Mr Hoon?" Instead of the studiedly modestresponse that one would expect to such a question, Hoon replied: "I suspect I'llbe doing rather more than that. I suspect I'll be heading for Downing Street inthe morning." The smug smile accompanying that gratuitous remark suggested tothe other guests in the studio that Mr Hoon was in line for a promotion."

But it wasn't to be. According to the press reports at the time, Blair initially promised him a new department for Europe to ease the blow of his demotion from Leader of the House, only to go back on his word before the end of the day was out.

Margaret Beckett seemed to confirm Hague's prediction by barring him from answering Commons' questions on his own portfolio, suggesting that he answer on Northern Uganda instead, or better still not bother to turn up...

Open season on Hoon now seems to be in full swing. The Sun informed us that his officials have changed his nickname from Buff(Hoon) to Odd-job. Tory MP Keith Simpson tabled a parliamentary question asking "What is the point of Geoff Hoon?". And Shadow Europe Minister Graham Brady is investigating how much it cost for Hoon to change the plaque on his door to add to "Minister for Europe" the rather desperate rider, " - Attending Cabinet".

I began to concentrate on the lonely figure of Geoff Hoon, sitting on thefront bench. You may remember that he had a spat with Mrs Beckett and so now heis the Minister for Europe who isn’t allowed to talk on Europe. As I understandit, he is now piloting our transport strategy with Kazakhstan. Yesterday heclutched a binder that held, I presume, his children’s homework.

It's probably this seeming shortage of friends that has driven Hoon to become the Cabinet's foremost leakmeister. Perhaps David Cameron needs to come up with some kind of new strategy for socially excluded people in Westminster...

Wednesday, November 22, 2006

The Government has released the latest quarterly update of the numbers of Eastern European workers who have registered to work in the UK since 2004. The figures generated headlines in this morning's papers. Most focused on the overall level of migration, but the Express led with the revelation that Eastern European migrants have made nearly 55,000 successful benefit claims in the UK since EU enlargement.

We’ve had a look at the numbers and there are some interesting results. It's now widely known that the Government hugely underestimated the number of people that would come to the UK after enlargement. But it’s also becoming clear that their claims on the numbers claiming benefits are wrong by at least a factor of 10.

As we've written before, in 2004 the Government promised to put in place a system which would stop EU migrants coming to the UK to claim benefits. Only a month ago they told Parliament that this had been successful; the proportion of Eastern European migrants claiming benefits was "under 1%".

For the first time yesterday the Government published figures for the number of repeat applications to the Worker Registration scheme – which gives us a more accurate (and lower) total number of people who have worked in the UK. If we divide the update figure on welfare claims by the new lower total we get a ratio of benefit claims of one in six or 16% of A8 migrants drawing benefits in the UK. The proportion claiming is also rising at quite a rate. So far this year 45% of migrants have made successful claims for welfare payments. We have said it before – but what we want is people free to move around to work, not to claim benefits.

Tuesday, November 21, 2006

David Cameron is finally slipping over to Brussels next month. The Tory leader who has studiously avoided the E word since taking charge, has realised that an aspiring party of government eventually has to admit that the European Union exists.... Cameron's path is being smoothed this week by Oliver Letwin. Letwin is the first senior Tory to visit Brussels since the attempt to pull their troops out of the centre-right European People's party in the European Parliament. He will dine with MEPs tomorrow and launch a set of five strategy groups to come up with a European policy.

Apparently the strategy groups the FT mentioned are a way to connect the tory MEPs to their policy review. Appa the five groups are going to be run by the tory MEPs and will be doing stuff on:

Economic reform

The EU budget, CAP, and waste

Democracy promotion / global human rights

Quality of life and the environment

The EU institutions

Not sure what to make of it. It probably makes sense for them to try and link up more with their MEPs - our impression is that it's very easy for MEPs to get stranded out of the Westminster loop (and thus never called by hacks) while on the other hand quite a lot of MPs don't really know that much about what goes on in Brusssels. Should be interesting to see what they come up with.

EU ministers are having dinner with Putin on Friday. Presumably Sushi is off the menu.

The Poles won't enjoy it very much either. As the blog of the Finnish EU Presidency points out - they are coming under a lot of pressure to agree an EU-Russia framework treaty - which they are currently blocking for various reasons, at least until Russia agrees to open up its pipeline system to other countries.

The EU says everyone has to negotiate together with Russia to get a better deal. The Poles ask why pipleines are routed around their country, and say that its them that suffers when Russia cuts off the gas and it's minus 20c outside. Fair point?

Oxfam New Zealand report on the EU's negotations to access Pacific fishing grounds.

Sounds like the EU might do for Fiji and other developing countries what they have already done for Grimsby, Hull and other fishing towns here:

This could result in domestic fishing being curtailed, or ... being reduced while EU access continues. In theory this should not be possible as EU policy only provides for access to ‘surplus’ stocks, and this access would be subject to the regional management bodies. Experience in Africa, however, suggests that EU boats have often competed directly with local fishers and have overfished until the point of fishery collapse.

Dull press releases of the world unite. The European Movement is planning to launch a new "Speak up Europe" campaign later in the week, as part of the EU's ridiculous "plan D for democracy" initiative.

According to the blurb, as a symbol of their passionate desire to reach out to real people they are going to be working with lots of other groups:

One of the strong elements of the Speak up Europe campaign is also the extensive partnership supporting it. A large international partnership was involved in the planning and will subsequently take care of the implementation: European Movement International (EMI), Fondation EurActiv, Young European Federalists (JEF), Union of European Federalists (UEF) and European Students' Forum (AEGEE).

In other words - Brussels loons talking to other Brussels-based acronym-loving loons.

Just slightly annoying that we have to pay for them to come up with this rubbish.

We're just back from giving evidence to the Home Office select committee. They're doing an inquiry on the future of the Hague Programme - the EU's ten year plan to harmonise member states' criminal and civil legal systems.

The MPs on the Home Office Committee are off to Brussels later in the week and seem very interested in the whole issue of better scrutiny of EU law - which is a bit of a joke at the moment in the UK, despite the best efforts of the MPs on the relavent committees.

We wish them luck - the EU's powers over home affairs have grown amzingly quickly in recent years. The only thing the Hague Programme is really comparable with is the single market programme in the 1980s - it is enormous.

The Blair government seem to be hoping to ride the tiger and hoping to steer the whole thing in a direction they can live with. But given the sheer number of controversial measures in the pipeline - that may not be do-able.

Meanwhile, the Enviroment committee have got the Environment Agency to fess up that the EU's Emissions Trading System isn't working. Responding to questions from the Committee this morning, the Environment Agency was unable to name any individual case in which a firm had reduced emissions as a result of the scheme, saying “it’s not clear whether we’re seeing any environmental benefits as yet”.

The Committee alluded to the fact that the ETS had cost businesses £500m so far, and then asked whether the ETS has had any tangible effect in reducing carbon emissions. Pressed further on this the people from the Agency said “we have not been aware of any significant impact”.

The Committee then went on to cite Open Europe’s research on the costs of complying with the ETS for the NHS. The Agency expressed concern over “the proportionality of allocations” and admitted that including smaller activities in ETS may not be appropriate: “There is a case for changing what’s in it…excluding smaller activities”, arguing that excluding such activities from the ETS would have a “negligible” effect on the levels of emissions. Asked whether they agreed that the allocation of carbon emissions has been "inherently irrational” the Agency said “we can only agree with that”.

Monday, November 20, 2006

We’ve launched a petition on the new downing street site to ask the PM to end Europe's unfair trade barriers against developing countries, and scrap the CAP.

Some facts:

Getting rid of global trade barriers could raise African GDP by up to 6%, lifting tens of millions of people out of poverty. (Oxford Economics 2005)

If Africa could regain just an additional 1% share of global trade, it would earn $70 billion more in exports each year – several times more than the whole region currently receives in foreign aid. (Commiussion for Africa 2005)

Despite trade preferences, developing countries still face higher trade barriers in practice than rich. Poor countries with a GDP per capita of under £5,000 a year face an applied EU tariff of 5% on average, while rich countries with a per capita income of over £15,000 a year face a tariff of just 1.6%. (GTAP database v.6)

This is a good cause, and the online form takes about 15 seconds to fill in. Please do forward it on. Or even link to this post.

Please help us at least match the numbers wanting to replace the national anthem with ‘Gold’ by Spandau Ballet...

Horribly superficial article on French politics by Martin Kettle in the Guardian.

"Royal also won because she represents a general break from the failed past. This is most obvious in her gender and her nice smile."

Great analysis.

She may as yet be extremely unspecific about how she intends to achieve her goals, but there is no missing the recognition that things must change... Royal's acceptance speech yesterday spoke of modernisation, individual choice, respect, justice with order, and even "education, education, education".

Hang on a minute. Sarko might be tough on banlieues - but he certainly isn't a Thatcherite. In a speech just last week he said that globalisation was "the cause of the protest vote and the rallying of increasingly large parts of the population to protectionist arguments." He said, "Europe needs protection. The word protection does not frighten me." He went on to say that the high euro needed to be brought down to save European companies. Hardly Iron Lady territory.

Sarko also proposed a European import tax on pollution, which would include taxing imports from third countries and which would be used to finance research in clean energy sources. He said, "There is no reason why we should have to respect the environment when we are in competition with countries and businesses which don't respect environmental rules at all."

Nor is Royal really a Blairite. That tag has been stuck on her mainly by her opponents.

So far Sego has said that “the banking system gets rich at the expense of the poor”, and called for looser monetary and fiscal policies.

According to the Economist on Friday, Royal will campaign on a programme of calling for a increase in government spending of 32%. Even the FTthink that she is "firmly grounded in the tradition of French socialism of the 1990s."

People have said for a long time that Brown would look for ways to reposition Labour on Europe, and even for ways to outflank the Tories.

There are a couple of straws in the wind this weekend. The Guardian this morning has Ed Balls' speech to the Institute of Chartered Accountants today, in which he will say that the EU's failure to sign get its accounts signed off for twelve years is a "dissapointment" and an "annual embarassment." He'll argue that: "By giving national parliaments greater opportunity to scrutinise how EU funds are managed I believe we can help give taxpayers the reassurances they rightly expect".

Mr Balls will tell MPs that in future parliament will be given an annual statement on all EU budget spending within the UK, which will be checked by the National Audit Office. He will use tomorrow's debate in Brussels on the 2007 budget to urge other member states to follow suit, arguing that they should show they can account properly for how money is spent and strengthen their controls against fraud. The Netherlands and Denmark are understood to be considering similar plans.

The Treasury have also been briefing that 'Gordon hasn't got enough credit for stopping us joining the euro' for a while. In Scotland on Sunday Brown's people up the ante a bit by (sort of) hinting that he would never join the euro:

"Gordon has made it clear, repeatedly, that this will be decided on the economics," a Treasury source said last night. "He has always harboured doubts over whether the time would ever be right to enter. This was last looked at three years ago and I don't see us getting any closer now. I think Gordon's going to be happy to kick this way past the long grass for as long as he's around."

This is all interesting stuff - but hardly revolutionary so far. Maybe the most interesting thing about Brown's positioning is that having marched himself up the hill as a sceptic, he will be in a very different dynamic to Blair when negotiating in Brussels.

When Blair was defeated on a particular issue it was easier for him to get some kind of face saving-agreement and then go out and sell it as if it were his own idea. He was happy (at least while high in the polls) to position himself as our "most pro-European PM ever", and to cover up the extent to which the UK was outvoted.

If Brown is going to position himself as a sceptic, things will be very different. In broad terms 'standing up to' the EU more will take him closer to the average voter. But on the other hand it means that there are no excuses if things go wrong. That's when we will know which way he is really going to jump.

Friday, November 17, 2006

The Commons European Scrutiny Committee has published a report today on the EU Commission's proposal to move criminal justice and policing into the first pillar of the EU's treaties. This would almost certainly abolish the UK's veto over things like a new proposal on rights for suspects in custody and the creation of harmonised criminal laws across the EU. It would also make the ECJ Britain's highest criminal court, giving it the power to decide our substantive criminal law.

Reading the conclusions of the report I feel sorry for the clerks who - you sense - really want to rip into the proposal, but are required to be more balanced than they would like to be. Nonetheless, despite the necessary "on one hand and on the other", they still produce a pretty tough conclusion:

"it appears to us that the proposal to use the passerelle does not offer significant gains for the UK."

"the present certainty about the existence of the means to protect the UK's interests would be replaced by uncertainty and risks."This report follows on from an in-depth analysis by the House of Lords on ths issue. The Commons Home Affairs Committee is also about to begin an investigation into the proposal. I would guess that just like the Commons EU committee they will be just as opposed to attempts by the EU to reduce their role in deciding what constitutes a criminal offence and how it should be punished on behalf of their voters.

One final observation - the EU Scrutiny Committee reports that the Government told them that the proposals are a non-starter and that the debate around the proposal is "over".Sounds like wishful thinking to us... Any bets on how long it will take before the Government has to eat its words?

Thursday, November 16, 2006

If you were wondering whether the government's "strategy" of making green issues the new rationale for the EU was driven by (a) massively cynical politics or (b) genuine heartfelt environmentalism, wonder no more.

This from Milliband on the CER site:

For my generation, the pursuit of peace cannot provide the drive and moral purpose that are needed to inspire the next phase of the European project. The environment is the issue that can best reconnect Europe with its citizens and re-build trust in European institutions. The needs of the environment are coming together with the needs of the EU: one is a cause looking for a champion, the other a champion in search of a cause.

Francis Maude has written to Tim Mongomerie to say that the Conservatives are thinking about changing the way they select people for the next European elections.

"There is some preliminary thinking going on about whether any changes are needed."

The implcit message in the letter is that they would centralise control if they felt that there was a chance that there might be a messy campaign to get rid of incumbent europhile MEPs (who are still - amazingly - the majority of the tory group).

"How do we avoid these selection processes from becoming divisive and acrimonious? Of course there will be differences in the various candidates’ stance towards the EU, and it’s right that those making the choices are fully aware of the candidates’ views. But there is a big prize for the Party in this process being conducted in a manner that is open and honest, while remaining civilised and courteous. I suspect that this is not really to do with the exact details of the process. I guess it’s more about how we all behave".

You can see why the tory leadership have the fear. Last time round a couple of sitting MEPs got dumped, but only a few. But now (1) Conservative activists have become much more sceptical about the EU; (2) the europhile MEPs have done more do wind up the membership - particularly with their behaviour over the EPP issue; and (3) internet based grassroots activity has the potential to focus anger into an effective campaign against the incumbents.

Add to that the liklihood that the euro elections are likely to fall at roughly the same time (summer '09) as the general, and that Brown will be keen to see if he can trigger some kind of tory euro row, and you have a cause for Maude's concern.

Its not totally inconcievable that the leadship would think about some kind of radical tightening of control. Taking away people's votes altogether might be a step too far. But some kind of tight A-list approach might serve the second purpose of heading off a sceptical 'decapitation' campaign against europhile incumbents.

In fact there might even be some people who would relish the idea of trying to impose "a list that looks like Britain" (no bad thing) in the teeth of sceptical opposition. The tories haven't said yet whether the a-list will be extended to the euro elections - there will be pressure to do so, and why not kill two birds with one stone?

However, that strikes me as a nuclear option. Maude says that:

"we can all therefore simply decide for ourselves that we will take shared responsibility, to coin a phrase, for making this a process that enhances rather than damages our Party’s reputation."

Which is a totally fair point. The Republican right did themselves no favours with their 90s witchhunts. In translation it sounds like Maude means: "If people who were a bit innefective were to get deselected without triggering an embarrising row, that would be one thing. If things got nasty, that would be another."

Can the tories find a way to make the election process work for them? One mild reform might be simply to allow postal voting (at the moment party members have to turn up to a hustings to get a say). That would probably strengthen the incumbents because of the name-recognition factor. Some of the tory MEPs like Dan Hannan call for open primaries to select the candidates - arguing that people who can reach to the uncoverted are likely to be the most effective candidates for them.

There might be something in that, and - as the Conservatives' own leadship election showed - a bit of controversy is not necessarily a bad thing for a party. If tory members really don't feel represented by their MEPs - wouldn't it be better for them to get some they can support, rather than voting for someone else later?

The CER are interesting - and just down the street from us. Charles Grant (its current Director) and Ben Hall (now at the FT) are the people most responsible for Blair's Europe policy. We wrote about the formation (and collapse) of their policy of a bit ago.

The idea is that EU leaders will pay lip service to the "largely rhetorical" preamble to the Constitution and its other "declaratory flourishes". This would then clear the way to push through the more "practical" changes - such as creating an EU Foregin Minister and EU President - in a mini-treaty.

They basically think voters are like tiny children - they hope that if they cut it up into small enough pieces we'll swallow it.

Wednesday, November 15, 2006

Aha - now Geoff Hoon is telling people in Strasbourg that the much vaunted 'controls' on Bulgarian and Romanian workers will be lifted after a year. This comes after the Home Office did a screaming u-turn and halved the number of legal places, after a fight with some farmers.

Apparently the Foreign Office are planning soon to release their own new draft treaty for the future of Europe.

The idea, presumably, is to try and steer Nicolas Sarkozy's "mini treaty" idea - around which a considerable consensus has formed in Brussels - in a less dangerous direction for the Government.

Can they pull it off? Seems to us that the basic elements that are always mentioned as part of the mini-treaty idea are enough to prompt calls for a referendum in the UK (and trigger votes automatically in Ireland and Denmark too). Sarko talks about an EU President, an EU Foreign Minister, more majority voting and a changing in the voting system to make it easier to pass legislation.

This is obviously bad news for the 263,000 extra people without a job. But it'll have an impact of the Europe debate too. As/when the problems with the UK economy get worse loads of idiots will probably crawl out of the woodwork to start banging on about how we should have joined the euro, and restart Will Hutton-ish droning on about how wonderfully the core EU countries are doing... etc etc until you die of boredom.

The weird thing is that there is loads of coverage of the UK dole figures in the Scandinavian papers this morning. Why? The reality is that - not to put too fine a point on it - how well different member states are doing has a big impact on their clout in Brussels. In those terms Brown is pretty screwed.

Clearly the winning move - assuming you are going to play the Brussels game - is to be friendly, but hammer things you don't want, and lead by example at home.

Brown has that all the wrong way round. He's lectured all the other Finanace Ministers to the point where they hate him - but at home he's allowed the UK economy to drop down the competitiveness tables like a dead cat. Meanwhile, despite spinning himself as a scep, and sniping from the sidelines, he has always failed to stop Blair from going into full surrender monkey mode on issues like the Budget.

When he becomes PM he is in for a rough ride on things European - both in Brussels and London. As unemployment goes up, his clout goes down.

Monday, November 13, 2006

The Sunday Times has learnt that Glenys Kinnock is to lead a group of 70 MEPs (accompanied by 84 officials) to a Barbados resort for a conference on ‘development and deprivation’ where they will meet leaders from some of the world’s poorest nations.

The five-day trip will cost taxpayers £200,000 and includes a four-hour chartered cruise on a 100ft ship billed as “the longest floating bar in the Caribbean”. Meanwhile politicians’ spouses can enjoy water sports and a trip to the “eighth wonder of the world”, Harrison’s Cave. MEPs are also entitled to a further £90 a day in expenses.

7 British MEPs are expected to attend, and one explained they had “no choice” about the location. “Everybody laughs when they hear it’s in Barbados,” said Fiona Hall, a Lib Dem MEP. “But why shouldn’t they organise the meeting in the Caribbean just because of European sensitivities?”

The europhile-dominated House of Lords European Union Committee has released a report saying that the EU Court of Auditors is too hard on the poor old European Commission.

Lord Radice, chairman of the House of Lords European Union Committee, criticised press coverage which suggested there was a "significant culture of corruption" in Europe's institutions."Our investigation has uncovered no evidence to support this suggestion," said the Europhile peer.

Hang on a minute. The House of Lords "investigation" into this was based on what? A massive in-depth EU wide audit? Did crusty peers go and raid Brussels institutions and rifle through filing cabinets?

No - in fact their "investigation" consists of them interviewing various sympathetic bods in their committee.

Looking at the Lords' reccomendations makes it even clearer that this is just a political press release. It reads like they have never read a CoA report:

"Make a clear separation between the audit of the Commission's accounts - which has always been positive - and the statement of assurance on the regularity and legality of underlying transactions - which has always been qualified" (They already do this, as the suggstion implies)

"Give separate verdicts on each different category of spending, instead of one overall verdict" (They do this)

"Make a clear distinction between fraud and other kinds of irregularity, giving separate figures for each" (This is very hard to do, although they already do it to some extent)

"Stop drawing conclusions about how EU money has been spent on the basis of an examination of a small number of transactions, which cannot "lead to an accurate picture of financial management" (This is just ludicrous - this is how every audit of a large organisation in the world works)

"List member states which demonstrate poor management of EU funds" (They do this as far as possible - Its not a single 'list' though, as different countries and DGs do things badly in different ways).

Amazingly they also go on to argue that so-called anti-fraud unit OLAF should remain part of the Commission.

"We are convinced by the arguments presented in favour of keeping OLAF administratively within the Commission. On the basis of the evidence we have received we emphatically refute claims that OLAF is too close to the Commission."

There is only one silver lining. From time to time the pro-euro camp show signs of better spin. They say that they are as keen as anyone to clean up brussels. They say that they want "reform". They talk a very good game.

However, moments like this are a useful reminder for everyone that, when push comes to shove, they would still rather try and cover up problems than attempt to change the system.

Friday, November 10, 2006

The Commission have started spending a whole lot more on web-based propaganda. Their jazzy new EU culture website has blogs and everything. Sadly the content is the same mix of:

(a) the slightly desperate:

"Over the summer I met someone who although resolutely eurosceptic has the practical drive to know that if EU funding can help the causes he believes in then good use should be made of what is on offer"

The EU has decided to lift sanctions against Uzbekistan. Sure - they haven't actually met any of the conditions the EU set for the lifting of sanctions. Yes, they haven't set up an inquiry into the shooting of at least 180 civilians in Andijan like we asked them to. And, like yeah, the human rights situation has actually got worse since then.

But - as one EU diplomat so rightly points out: "The sanctions would probably be dropped sooner or later with no political gain for the EU, but now there is still an opportunity to sell them for some kind of closer cooperation. Everybody wants to be politically correct, but the [German] calculus is quite persuasive."

Its great that the EU is taking an ethical lead here and not being distracted by loads of loot.

Thursday, November 09, 2006

Word has reached us that EU Internal Market Commissioner Charlie McCreevy was given a less than charitable reception at a top level City of London dinner last night, where he was meant to be guest of honour. It strikes us as yet another indication of how the captains of UK industry seem to be getting fed up with the sheer volume of regulation coming out of the EU, and in particular the Financial Services Action Plan. This costly attempt to impose a one-size fits all regulatory structure on European financial services has been described by the Paris-based Conseil D’Analyse Economique as “a heavy, complex, partially contradictory regulatory arsenal which is incapable of delivering the anticipated results.”

Speaking at the Association of Corporate Treasurers’ annual dinner at Grosvenor House, attended by 1500 bankers, and one of the major events in the City calendar, McCreevy apparently spoke of the light touch, principles-based approach of the FSAP, even going so far as to use the word “tip-top” to describe Brussels regulations, and to sing the praises of the notoriously costly “MiFID” directive as “an example to the world”.

According to our man at the dinner, “He completely misjudged his audience. He spoke as if to a crowd of Brussels-based eurocrats…He lauded the EU's important role in world financial markets and only passingly acknowledged the fact that most of this was due to London. His audience quickly became restless and ignored him. The MC had to ask for silence several times. When McCreevy finished there was mocking applause.”

Worse was to follow; Ruby Wax gave the next after-dinner speech, wryly thanking McCreevy for "warming up my audience", before going on to say "He spoke for 20 minutes. It seemed like 20 years."

As our recent poll highlighted, British businesses are becoming increasingly disenchanted with the EU. In particular the City is increasingly worried about the effect that the FSAP will have on the global competitiveness of London, the continent’s most important financial centre. McCreevy either failed to recognise this or chose to ignore it.

Similarly, in the Times today, a survey of the 100 most powerful men in UK business found that only 19% thought that the UK should change its mind and begin using the euro. That 81% disagreed just underlines the shift in business opinon from the early days of the Blair adminstration when nearly all major businesses and groups like the CBI supported the drive to introduce the single currency.

Unfortunately for the Commission, its fine talk about "tip-top" regulations and cutting back red tape is getting short shrift from businesses who know that the reality on the ground is that they are being burdened by more red tape than ever before, much of which comes from Brussels, as our research has shown.

But until the Commission wakes up to the fact that the City is tired of empty rhetoric from Brussels – and will start to vote with its feet, relocating outside Europe unless something concrete is done to deal with the problem – even relatively liberal figures like McCreevy can expect to find the Square Mile increasingly hostile territory.

Wednesday, November 08, 2006

Some poor people here spent yesterday watching EU ministers squabble pointlessly over the Working Time Directive at the Employment, Social Policy and Consumer Affairs Council (EPSCO).

To be honest it wasn't great TV - but the fact that we could watch at all is a big change. If British Foreign Secretary Margaret Beckett had got her way the public still wouldn't be able to watch EU Council meetings, but thankfully Blair let her "hang out to dry", (to the great amusement of Geoff Hoon) and a new era of transparency was (supposedly) ushered in.

Or was it? Telegraph journalist David Rennie has criticised the new arrangements saying that they make it "impossible" for countries to hold real discussions. Instead, deal-making gets done over lunch, or when the cameras are turned off. Interestingly, Rennie argues: "With 25 countries round the table, there is almost no secrecy at closed-door Brussels meetings. Any half-decent journalist can usually find out what happened in a private ministerial meeting within 20 minutes of its end. So the openness is phoney, gains us nothing, and is utterly counter-productive."

There is something in this. But the new access is not a total waste of time - and these kind of arguments must not be allowed to become an excuse to prevent further opening up.

Firstly, as members of the non-press-pass carrying public it certainly makes it a lot easier for us to find out the background details and get a sense of what's going on, if we can watch the meeting. Naturally deals are still getting cut in smoke-filled corridors and over generous Brussels lunches, but at least the ordinary punter can now find out a bit more about what their government thinks on the issues rather than having to rely on press reports.

Secondly - in practice not all deals can be done "in the corridor". With 25 or 27 members you would need a really big hallway, quite apart from anything else. So they are forced (in the limited areas where some transparency now applies) to have at least part of the discussion in public.

So yesterday for example, we could get a sense of the bizzare posturing of some member states, which we (outside the Brussels lobby) would not otherwise have heard about - for example the Luxembourgers describing the opt-out as a "heresy" and the French complaint that their businesses were suffering from "unfair competition" (even though they are subject to a 35 hour week not a 48 hour week, but anyway...).

Quote of the day was from the the German minister who said, "What exactly have we achieved today? We've had a nice few hours together but that's about it." (BTW - you too can join in the fun by watching the meeting here.)

We seem to remember that there were a lot of similar arguments made in the UK about the introduction of TV cameras into the Commons. MPs, it was said, would always be acting up for the cameras and not take the issues seriously. It did take some a while to adjust. But they got over it. Today almost no-one thinks the Commons should go back. Perhaps EU ministers just need to learn to 'agree to disagree' in public...

Sunday, November 05, 2006

Today's Sunday Telegraph has a story about an issue we have been working on for a while now.

The story so far

Back in the Summer David Miliband and Geoff Hoon argued that "The EU's emission-trading scheme (ETS) is the most innovative and efficient method yet invented for reducing carbon emissions to manageable levels."

In fact they went as far as to say that the environment was going to provide a new purpose and rationale for the European Union. The wrote that the EU, "could be as important to the environment in the first half of the 21st century as it was to peace in the second half of the 20th". In fact, they suggested, Labour could use it as an issue to beat the tories with. "David Cameron's hostility to Europe makes a mockery of his claimed green credentials," they wrote.

But even our initial research revealed that in reality the ETS was a disaster area. Overall, the EU members had printed more permits to pollute than there is pollution. Member states handed out free permits for 1,829 million tonnes of CO2 in 2005, while emissions were only 1,785 million tonnes. Emissions would have to be 44 million tonnes higher for the system to actually “bite”.

However, that doesn't mean it hasn't cost some member states. In particular, the UK has set a tough target on emissions, while other member states have set very loose targets. All this means is that UK firms have to buy permits from rival firms in other member states, resulting in a cost of just under one and a half billion pounds over the first three years, while firms in Germany will make just under a billion pounds selling off their surplus permits. In other words UK companies transfer money to other member states, without getting any reduction in emissions.

Worse still, instead of auctioning off permits to the highest bidder to create a proper market, the permits were simply allocated to individual firms by national governments under 1960s style National Allocation Plans.

Under the NAP the public sector is being forced to take a hit. Under the UK National Allocation Plan, NHS trusts were not given enough permits, and we estimated that they would have to spend between 1 - 2 million a year buying up extra permits and running the scheme.

The plot thickens

Michael Gove MP, (who sits on the European Scrutiny Committee), asked the Government to confirm how much the public sector was paying. He asked various different government departments. The MOD responded with military efficiency, immediately providing a detailed breakdown of how much each RAF base had paid and for what.

But the Department of Health were less forthcoming. Junior Health Minister Andy Burnman replied only that such figures were “not held centrally”.

That struck us as rather odd.

We made a freedom of information request for internal correspondence within the NHS about the question.

The emails we have been given as part of the FOI request show that DoH had been given the answer to the parliamentary question in a spreadsheet by the NHS Purchasing and Supply Agency (PASA). However, the DoH chose not to answer the question. Indeed, the DoH Press Office (neutral civil servants, you remember) had spent quite a while trying to "scotch" our research.

The FOI request came back with about a hundred pages and all the relevant stuff buried in loads of irrelevant emails. (Hint: You can normally tell the key pages because they are particularly badly photocopied.)

* Patricia Nicholas at the DoH press office sent round an email asking for figures to "robustly scotch" the £1.3 million figure. She wrote: "we need tackle the £1.3 million bit, and emphasise that in no way will frontline services be affected".

* After receiving the figures from PASA, Shumon Rahman (also at the DoH press office) complains to PASA that "the last thing we want to do is come with a speculative 'what if...' all trusts spent money on carbon credits only to find that 10% have already spent a ridiculous amount and the journalist has managed to uncover them." In another email he notes, "If we cannot rebut the £1.3 million figure we will be getting negative publicity."

* In fact PASA told the DoH that our £1.3 million figure "would have been right at some point in time".

* PASA warned DoH that there was "no way of knowing" how many trusts have bought permits at an overpriced rate "short of ringing them up" and complained that: "PASA advice has been for them to wait, but as they do what they want anyway I've no way of knowing"

Seperately, we had also asked each affected trust how much it had cost them (a) to buy permits and (b) to administer the scheme. For the 85 hospitals which replied to our FOI request, the net cost for the first phase of the ETS (05-07) was 5.8 million (even taking into account the couple of trusts that made money).

That’s the equivalent of employing 309 extra nurses (starting pay for nurses is now £18,698, using 2005/06 rates).

For Glasgow the net cost for the four hospitals in that trust is just under half a million.

The one from Epsom gives a sense of just how much admin is involved. At the end it notes that “Our non-pay total compliance costs for 2005 are circa £28K. Had we spent that money on upgrading lighting installations (say) we could have put an additional recurring £10K p.a. of public money towards patient care and reduced national CO2 emissions by circa 8t p.a.” It also notes that “An email search on ‘EU ETS’ finds 1190 messages on my PC. Many of these are to and from NHS colleagues.”

Earlier, the DoH had confidently predicted that there would be a surplus of permits in the NHS. A DoH document said “Based on the trusts that have responded to PASA, there appears to be an overall surplus of allowances in the NHS. The majority of trusts have small deficits but a minority have significant surpluses.”

As a point of comparison - if they sell at the prices NHS trusts have been buying at, Shell will make £49.9 million out of the scheme during the first phase selling off surplus permits, BP will make £43.1 m and Esso £24.7 m… clearly the private sector are a bit better at lobbying...

Does this matter? What's 6 million quid out of the NHS budget? The EU has probably cost the NHS rather a lot more via the working time scheme for example. The Observer reported recently that 60 NHS hospital wards are threatened with closure in large part due to the expansion of working time rules to the NHS.

What all this does demonstrate is a lack of grip and a lack of thought about the policy. There is no good reason for the NHS trusts to be part of the scheme. Most of them only qualify because a quirk in the rules means that their masses of backup generators get included in the calculation of their potential output, taking them over the 20 MW threshold.

Nor is it the cheapest way to reduce emissions in the public sector. The NHS trusts have been on "green" programmes for years. For example, one reply notes that their hospital had just shelled out £28,000 on the scheme, and that "Had we spent that money on upgrading lighting installations, say, we could have put an additional recurring £10,000 per annum of public money towards patient care and reduced national CO2 emissions by circa 8 tons per annum."

That could stand for the scheme as a whole. Gordon Brown is still calling for the ETS to be expanded when what it actually needs is a total overhaul. At the moment the UK could save billions and reduce its emissions by more, by going back to a UK-only trading scheme. Unless someone can knock heads together in Brussels and sort it out, UK participation is going to carry on being a waste of time and (NHS) money.